There’s a lot about the future of electric vehicles (EVs) that’s still unclear, but one thing is for sure: they’re here to stay. More than 361,000 EVs were sold in the U.S. in 2018, an 81% increase from the previous year.
And automakers are taking note. Car companies from Porsche and Audi to Hyundai and Kia have all committed to releasing new electric models in 2019, and Volkswagen has promised to produce 22 million EVs in the next decade.
“We’re seeing such a commitment from manufacturers in terms of growing their EV lines. We’re going to be seeing more and more vehicles,” said Carol Werner, executive director of the Environmental and Energy Study Institute.
The EV landscape is changing quickly. As a result, there are a lot of people who might not understand much about the vehicles, their accessibility and — perhaps most importantly — their affordability.
With that in mind, here are four common myths and misconceptions.
1] Even with tax credits, electric cars are still too costly
Insurance rates may add to the cost of owning an EV (more on that below), but there are a lot of other ways to save.
Tax credits play a big role here. The IRS offers between $2,500 and $7,500 to anyone purchasing a new electric vehicle, with the amount differing based on vehicle size and battery capacity.
That makes a big difference, especially considering how affordable some EV models have become. For example, a 2019 Nissan Leaf — which qualifies for the full $7,500 tax credit — comes in at $29,990 before subtracting the IRS incentive. New models from Kia, Volkswagen and Fiat all cost less than $27,000 when with the tax credit included.
“Where electric vehicles were a decade ago and where they are today is quite different from a cost perspective,” said Professor William F. Fox, director of the University of Tennessee’s Boyd Center for Business and Economic Research.
However, the IRS credit only extends to the first 200,000 electric vehicles sold by each manufacturer. That may sound like a small amount, but so far only a few brands — such as Tesla — have actually hit that threshold.
One important note on fees: states like Texas are starting to weigh the consequences of increased electric vehicle use, especially when it comes to lost tax revenue from gasoline sales. For Texans, adding fees for electric drivers will increase the already hefty financial burden of owning a car in the state — at $2,330, the mean cost of insurance in Texas is well over the national average.
2] Electric cars don’t have enough range, and recharging is a pain
No one wants to stop every 80 miles to charge their car. As a result, battery life has always been a sticking point for would-be electric drivers.
But EVs have made huge strides in that department. While it’s true the latest Tesla Model S can travel up to 370 miles on a single charge, long battery life is no longer exclusive to luxury models. More price-friendly brands like Kia and Hyundai also now offer vehicles that can exceed 275 miles.
It’s not just about the cars though. Werner points out that the increasing number of charging stations has been huge for combating what she calls “range anxiety” — the concern that EVs can’t drive as far as needed. But infrastructure is helping defuse that anxiety. There were 61,067 public charging stations in the U.S. by the end of 2018, according to the U.S. Department of Energy’s Alternative Fuels Data Center. That’s nearly double the nationwide total from 2015.
3] Buying an electric vehicle won’t lower your insurance rates
Money plays a big role in the decision to go electric, and, unfortunately, insurance companies won’t help in that department. Having an EV will increase your auto insurance by an average of 23% per year, according to a recent study.
The reason for this is pretty simple: EVs are more expensive. The average electric car costs more than a traditional gas-powered vehicle, meaning insurance brokers may want to protect against potentially expensive repairs.
That being said, insurance rates differ by state — and even by city — so be sure to check possible rates before making a decision.
4] Going electric means buying your own car
Cost aside, switching to an EV doesn’t necessarily mean buying a car — in fact, it could mean the opposite. According to Fox, the future of electric vehicles lies in autonomous vehicles and a network of shared, self-driving cars that will eventually be a major transportation option.
In this situation, the two technologies — electric cars and autonomous vehicles — would go hand in hand. Fox describes this sort of network, which may be owned by ridesharing services like Uber or Lyft, as the force that will bring electric cars to the forefront.
“Until autonomous vehicles are on the street, I don’t expect to see a massive shift toward EVs in the U.S.,” Fox said.
In addition to companies like Uber and Tesla, manufacturers such as Hyundai, Kia and General Motors have all started investing in autonomous vehicles. The “self-driving taxi” revolution may be a few years from happening, but it holds promise that switching to EVs could mean more than just buying a new car.
“It’ll just be a different world,” Fox said. “It’s a world we don’t know today.”
Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman’s focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.
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